Pub operator JD Wetherspoon has reported a 25 per cent fall in annual profits to £58.7 million for the year to July 26, despite like-for-like sales increasing 3.3 per cent.

Group profits were weighed down by one-off items including an £11.2 million write-down on the value of under-performing pubs.

Stripping out exceptional items, profits were down two per cent to £77.8 million, which the group said was partly down to higher wage costs.

Bar sales increased 1.2 per cent and food sales rose 7.3 per cent, though slot and fruit machine revenue was down 2.8 per cent.

Tim Martin, chairman of JD Wetherspoon, claims pubs are coming under unfair pressure from the way they are charged VAT compared to supermarkets, with pubs charged 20 per cent VAT on food sales while supermarkets are charged nothing.

Martin says this allows the big grocers to subsidise alcohol sales.

He has also accused the government of deciding new living wage rules “on a whim” and for “political reasons”, which he said puts pubs at a disadvantage against supermarkets because pub wages account for a higher proportion of sales, meaning wages are higher.

He said: “By pushing up the cost of wages by a large factor, the Government is inevitably putting financial pressure on pubs, many of which have already closed.

“This financial pressure will be felt most strongly in areas which are less affluent, since the price differential in those areas between pubs and supermarkets is far more important to customers.

“It is certain that high streets in less affluent areas, which already suffer from serious problems of empty shops and dereliction, will suffer further if pubs and other labour-intensive businesses close.”

The government plans to introduce a new living wage from £6 per hour at present to £7.20 an hour from next April for workers over 25-years-old, rising to £9 an hour by 2020.

JD Wetherspoon, which employs nearly 35,000, said it opened 30 pubs in the financial year and closed or sold six taking the estate total to 951, with plans to open up to 20 new outlets in the coming year.

The group said like-for-like sales in the six weeks to September 6 rose 1.4 per cent and it expects trading performance in the current year to be similar to or slightly above 2014/15 levels.